Industry Waiting For Taxi Franchise Proposal Specifics

OCEAN CITY – Tempers may have started to flare, but town officials are trying to keep their cool and assure the taxi industry that any changes made to the town’s cab service is in the name of improvement and not a hostile takeover.

Since City Manger Dennis Dare’s mere mention of the idea to create a taxi franchise in the town of Ocean City two weeks ago, there has been a growing number of opinions and perhaps conspiracy theories brewing from those who work in the taxi industry, ranging from irate to merely calling for more information.

“This is more than just an idea, they are already talking behind everyone’s backs and formulating their own opinions, and they are going to come out with a recommendation and shove it down our throats,” said Classic Taxi owner Christy Freeman. “We’ve had the toughest economy ever and a terrible summer, and now they want to increase revenue for the town by isolating the taxi business. I don’t see them trying to increase the business license fees for the Boardwalk merchants.”

Freeman, as well as others in the industry, allege cab companies are being victimized by the town’s apparent desire to create a taxi franchise, which could resemble a medallion system used in smaller municipalities and the largest of cities. It would essentially put a cap on the number of taxis allowed on the road. Each medallion would be available for an annual fee, and town officials, such as Councilman Doug Cymek, say that these medallions would hold value and would increase in value after point of purchase.

“Just based on the principles of supply and demand, the medallion system would hold value for the cab companies who have one,” said Cymek, “but it’s a little early to really be talking about a direction that we are going to go with this idea, because as of right now, there is no defined direction.”

Cymek said that in mid-January, the Police Commission will hold a meeting, which might be closed to the media and the public, to develop Dare’s idea for a taxi franchise to a level where they can then invite cab company owners to the table and come up with an official recommendation to be taken before the Mayor and City Council sometime in February.

“This will be done very fairly, and it is not our intent to put anyone out of business,” said Cymek. “There are portions of this system that need to be revamped, and we want to address that properly and efficiently. We realize that this will stir up some controversy because people may worry that we are tampering with their livelihoods, but in reality, we are trying to make the service better for the users and the companies.”

Wayne White, who has owned City Cab since 2007 and had owned White’s Taxi from 1993-2000, said that it’s too early to tell the town’s direction but he conceded that some changes needs to be made.

“First of all, there’s too many cabs on the road and it’s hard for any of us to make any real money out there, but it’s too early for me to say how I feel about the town’s desire to create a medallion system or a franchise per say, because they haven’t really said exactly what they want to do yet,” White said.

Some in the industry argue that there is already a medallion system of sorts in place, pointing to the $150 per year sticker that is issued by the Ocean City Police Department to each permitted taxi that is on the road.

One independent cab driver, who asked to remain anonymous, said that a medallion system, like ones used in large cities like New York for instance, would be detrimental to the transient market here in the resort.

“If they put a cap on how many cabs can operate in Ocean City, it will kill open enterprise, and it will turn the cab industry into a closed shop,” he said. “It will take out all the smaller companies and those medallions will end up being like Washington Redskins’ season tickets: someone’s got to die before the next person in line can get one.”

Dare disagrees with this notion, pointing out that too many cabs on the road essentially over-saturates the market.

“This is not any sort of original idea that I brought forward, as they do this in a number of major cities and town’s of our size,” said Dare. “We are trying to investigate and research ways to improve the service that we provide for people in Ocean City, so we will start by creating a proposal, and then we will invite some people in the industry to the table to start the conversation.”

Freeman worries, however, that the costs to do business in Ocean City, especially in the taxi industry, may not be able to shoulder any increase in operational cost: medallions or no medallions.

“I’m at a point now where if they asked me to raise my costs in the dead of winter, I don’t know if I could survive,” she said. “We’ve put some money aside to pay for the renewal of our licenses and permits at the end of March, but I doubt that a lot of companies out there after the summer that we had, will be able to even shoulder an additional $1,000 per car for a medallion or whatever. So, to be honest, I think that this change is going to put people out of business even if they say they aren’t trying to.”